Privatization could bring more expertise to the city for less money

Daily Sun News

Friday, February 18, 2005

The privatization of the City of Sunnyside's water and wastewater systems isn't a new concept. It's something city officials have contemplated for the past three or four years and something other communities have been doing for a number of years.

City Manager Bob Stockwell said the issue of privatization was one city council members made clear they wanted further examined during one of their recent retreats.

"The operation of the wastewater treatment plant is a complex and thoroughly regulated part of city business," Stockwell said.

He noted that everything from the water quality to sewage treatment is permitted by the state of Washington, and requires that the people working in the water and sewer departments have certain levels of certification.

Stockwell said the operation of municipal water and sewer systems used to be quite simple, but as time has passed it has become an industry that has grown more and more complex.

And as the water and wastewater industry has grown in complexity, Stockwell said it has started evolving in the private sector. He noted that in Europe water has been a private run industry from the beginning, and it's those companies that have started moving into the U.S. market.

Stockwell explained that it was 25 to 30 years ago that the companies designing and building water and sewer systems started getting inquiries from municipalities wanting them to come in and run the systems.

Stockwell noted that in most other things cities do there is not a private sector component that can offer the same services. He pointed out that there aren't private companies that can come in and provide the same services as the city's parks and recreation department.

However, Stockwell said for cities the same size as Sunnyside and smaller it can be difficult to maintain the expertise needed to operate a complex system like the water and wastewater divisions in the most efficient manner.

Stockwell said the city currently has 11 employees working in the water and wastewater divisions. He said of those there are four or five with various levels of certification, which is the minimum the city is required to have.

According to Stockwell, one of the reasons the city is looking into the privatization of the city's water and wastewater systems is so a comparison can be done to see if the city is doing things as cost effectively as possible.

Stockwell said privatization also brings with it unlimited access to all of the technical expertise behind the private firm that is coming in to do the work, which in this case is Veolia Water. He noted that the company, in most cases, will bring in a project manager, who is an expert in the field, and behind him are hundreds of people who can answer questions about water and wastewater.

"They have knowledge of what works and doesn't work," Stockwell said.

He noted that as the city goes through the design phase of its wastewater treatment plant upgrades the project manager at the site can be helpful in commenting on the project plans.

"It's all part of the normal operating expense," Stockwell said.

Stockwell pointed out that moving the city to a privatized water and wastewater system could prove to be more cost effective. He noted that bringing in a private company that has experience operating similar plants throughout the world, means that they have a lot of understanding when it comes to how to operate the facility efficiently.

He said one way the company can do this is through cross training the staff to work on both the water and wastewater side of things. According to Stockwell, this would mean that the two systems could be run with fewer people. He noted that maybe instead of having 11 employees working in water and wastewater it could mean that seven people could do the same work.

"Which means it costs less," Stockwell said.

He said the company can come in and pay a comparable wage and benefits package, use fewer people, and use its experience to schedule and cycle the water and wastewater systems to run more efficiently, which will use less energy.

Another area the city could see some cost savings is through the purchase of the chemicals and supplies needed to operate the water and wastewater systems. Stockwell said since the company is so large and is purchasing chemicals for multiple plants they can often times get a better price on chemicals than the city.

Stockwell said Sunnyside isn't the only city in the area that has looked at privatization. He noted that Vancouver, Wa. contracts for services and that Cle Elum is a place where the company that is building their plant will then come in and operate it when it is completed.

When it comes to customer service, Stockwell said privatization should have no effect. He said the only difference community members might notice is that the person who comes out to work on water issues at their house might be wearing a different patch on their shirt. He noted that they will even be driving the same city trucks, and that the city will continue to bill for water services.

The privatization of services is something the city has just recently been looking into. Stockwell said a lot of research has gone into the project. According to Stockwell, the city talked to 25 different cities that have privatized and listened to their concerns and how things went in their communities.

Stockwell said it was from these conversations that the city learned that one of the most important things a city can do when looking at privatizing is to make sure that the agreement between the city and the water company is specific. Stockwell said this is one reason the city has spent so much time going over the agreement they are drafting.

Stockwell said one of the items in the agreement is that the city has to have a say in who the project manager will be in Sunnyside. He said the contract provides an opportunity for himself and the public works director to help decide who will be brought in as the project manager.

Stockwell said a lot of work also went into finding Veolia Water. He said when the city first started looking at privatization they put out a formal request for proposals and received three, including the one from Veolia.

"Veolia came out on top of that process," Stockwell said.

However, it wasn't going to be until the city went through the negotiation process that they would have the solid numbers they needed to determine if privatization would be worth it. Stockwell said a recommendation will be made to council as to whether or not the city should privatize its water and wastewater systems during a study session on Tuesday, Feb. 22. He said no vote will be taken at that time. Instead, council members will likely vote on the proposal during its Feb. 28 meeting or the first meeting in March.